What should I do next? – Buying a property

To a first time property buyer, one could be confused and worried about the process to obtain a mortgage loan after confirming a property. We understand that the process could be complicated and confusing to many. Therefore, in this article we will highlight the steps involved.

Process

  1. Placement of Booking
    1. Purchaser normally place a booking through a real estate negotiator/owner (subsale-readily completed property) or developer (under-construction property) after a few viewing and satisfied with the property chosen.
    2. Normally a booking form/sales form will be issued upon confirmation and agreement by both buying and selling parties on price, terms and conditions.
    3. Typically a booking fee will be needed from Purchaser at this stage. (normally 2%-3% for subsale and as determined by developer for under-construction property)
  2. Application of Mortgage Loan
    1. Purchasers will normally have 14 – 21 days to source and secure for mortgage loan prior to confirmation on the purchase.
    2. Purchasers can do this through mortgage advisor or bank. Application can be done concurrently through several banks or financial institution. No cost involved for application according to the industry practice at this moment.
  3. Acceptance of Letter of Offer
    1. A Letter of Offer (LO) will be issued by financial institute if purchasers meet the borrowing criteria of their institution.
    2. Purchaser has the option to compare and understand the differences between different terms and conditions offered by different financial institution.
    3. Purchaser will then acknowledge the acceptance of the offer by signing the LO. A copy will be given to Purchaser for safekeeping.
  4. Sales & Purchase Agreement
    1. Purchaser could then proceed to sign the Sales & Purchase Agreement which confirm the purchase of the property.
    2. During this time, the purchaser will need to pay the balance down payment which sum up to 10% of the purchase price (the booking fee paid earlier should be considered as part of the down payment)
    3. This will be done at appointed Legal Firm. Purchaser will be required to pay the legal fees involved and stamp duty (or Memorandum of Transfer-MOT) during the signing. It could sum to 2.5% or higher of the purchase price. (The sum mentioned is merely for reference as it differ from case to case).
  5. Loan Agreement
    1. This is a separate agreement from Sales & Purchase as this is an agreement between Purchaser and Financial Institution for the loan granted for the property.
    2. This could sometime be done together with SPA if the same legal firm appointed and time allowed.
    3. During the signing too, purchaser will be required to pay the legal fees and stamp duty for this agreement. This would also sum up to around 2.5% of the loan amount. (Again this is merely for reference only)
  6. Own Your Property
    1. Purchaser will normally be informed by Legal Firm when all the processes completed and the property is ready to be handed over to purchaser.
    2. Another indication that a purchaser is about to take possession of the property will be the notice from financial institution with regards to full disbursement of loan and start of monthly instalment.

The flow discussed here is the simplified process without in depth discussion on matters that could arise throughout the process. Details in each process will be discussed in near future.

Feel free to contact us at ask@ethanteh.com for further clarifications or mortgage loan application.

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What does a Mortgage Advisor/Broker does? When to see one?

Many of the public has yet to know that there’s a group of Mortgage Advisers who work independently from bank to advise and assist client on mortgage loan application for property financing/refinancing.

Instead of being attached to a particular bank, mortgage advisor work independently and normally attached to some firms with license from certain banks as their sales representative. Mortgage advisor would then working as associates with the firm after meeting training and certain certification requirement as set by the bank.

As mortgage advisor, at most of the time, will assist client to do application to more than one bank to increase the chances of approval and for comparison of better offer from different banks since at this moment, there’s no processing charges for mortgage loan application. Also at this moment, there’s no charges to client from Mortgage Advisor but Mortgage Advisor earned the referral fees from whichever bank that secure the client.

When you should see a Mortgage Advisor?

  1. Whenever you need to apply for a property financing and do not have much time to see different salesperson from different banks.
  2. When you want to find out the loan eligibility before you search for the right property.
  3. When you need advice about restructuring of loan and find out more about existing property loan.
  4. When you need an unbiased advice regarding property loan. – “There’s no best product, but there’s product that best suit you”

When you should go to bank instead of Mortgage Advisor?

  1. Mortgage advisor needs full documents and cooperation from client to understand the client’s situation, needs and suitable package/banks. If client is unwilling to disclose or provide income documents, client should opt to visit the bank personally and preferably the existing bank that the client is maintaining the account as most of the information is readily available to them. However, this will limit the client to accept whatever offer made by that specific bank.
  2. Most of the Mortgage Advisor only representing certain bank/financial institution. If client has specific preference on a bank that is not represented by the Mortgage Advisor.

If you are interested to join us as Mortgage Advisor, kindly email you resume to: career@ethanteh.com